When starting a business that stems from a passion, like being a doctor and having a desire to make an impact in a community, the last thing you would worry about is an accountant stealing from you.
Dulcy Rakumakoe grew up in the dusty village streets of Temba, just outside South Africa’s capital, Pretoria. Growing up in the townships, she was often encouraged to become a doctor because she was one of those smart children.
“When I looked around in the township, there was one Dr Mosala, and he lived in a very nice house. But I also noticed that the community really loved him,” says Rakumakoe.
So in 1999, she completed her medicine degree at the University of the Witwatersrand in Johannesburg and started her internship in Klerksdorp, a small town in the North West province. She then went to do her community service at Ganyesa Hospital and this is where the entrepreneurial bug bit.
“I saw how people were struggling to access healthcare. People would travel plus-minus 100 kilometers just to see a doctor. I thought that is unfair and I must do something,” she says.
Rakumakoe went on to open up her first practice in Vryburg, a North West province town which had a shortage of doctors. There were also around 20 villages around Vryburg which had no medical facilities. In this small town, Rakumakoe also joined a female football team, doubling up as its goalkeeper and team doctor.
As a small practitioner, she had little knowledge of financial management and accounting. So she entrusted this to a small town bookkeeper, recommended by her dentist cousin who’d worked with the accountant before. It also came at an affordable fee of R2,500 ($235) every two months.
For five years, the accountant handled everything financial in the business, including payments to the South African Revenue Services (SARS) – the government’s tax collecting agency. The accountant, as Rakumakoe thought, paid around R15,000 ($1,400) to SARS every second month for value added tax (VAT) and around R40,000 ($3,770)for annual income tax. All seemed well and good.
“I didn’t pay much attention to the financial side of things, as long as I saw the money I made at the end of the month… the type of relationship I had with him was that he would tell me, ‘this is how much you owe to SARS’ and I’ll just give him a cheque and tell him to sort it out,” she says.
After reaching the ceiling of being a doctor and the community having been saturated with more medics, Rakumakoe left Vryburg for a mining town in Carletonville, just outside Johannesburg and the accountant decided to continue working for her.
Here, Rakumakoe opened a practise focusing on the health of the miners, especially with HIV being a big problem in the mining industry. According to the World Bank, migrant miners between the ages of 30 and 40 are 15 percentage points more likely to be HIV positive and a woman whose partner is a migrant miner is eight percentage points more likely to become infected.
While plying her trade around the mines, the South African Football Association called her up to be the team doctor for the women’s national football team Banyana Banyana. This led to the international governing body, FIFA, calling her up to be a field medical officer during the World Cup in 2010.
But back at the mines, something else was brewing. In March 2008, a year after moving to Carletonville, Rakumakoe received a phone call. She relayed the message to the accountant that SARS had just done an audit on her business and she needed to prove that she didn’t owe the taxman around $75,000.
“After that first call he switched off the phone and disappeared,” says Rakumakoe.
A few days later, a letter from SARS arrived warning Rakumakoe that  she needed to settle the debt in two weeks or her business would be shut down.
“That’s when I felt the world crashing down on me. That’s when I felt what’s the point of being in business when I owe close to R1 million. How was I going to pay back that money in two weeks?” she says.
“I even tried going to the police, we just couldn’t find [the accountant]. I felt like it was the end of my business. I didn’t feel strong enough to face SARS. At that point I thought let me just allow them to come and evaluate what I owe so that they can take it and I’ll go look for a job because this business thing is not working.”
In her devastation, a friend introduced her to Kamva Chartered Accountants, who came at a much higher fee than what she was used to. She paid the firm R20,000 ($1,884) to manage her case with the tax collector and also for their services every two months.
“They re-audited my books for the past five years and presented cases to SARS with explanations of what had happened. It turned out my accountant was a fraudster who was directing all the money that he told me was due to SARS to himself,”
says Rakumakoe.
Luckily for her, the amount she owed was reduced and the tax collector allowed her to make payments of what was due over a six-month period.
“That was the lowest six months for me in that basically all my income was going to SARS to pay the debt and get my things in order,” she says.
“I knew at that point that I had to understand the financial side of the business. It was a risk for me to have been running a business for so long without financial understanding and knowledge.”
This prompted her to register for an MBA with the Gordon Institute of Business Science to help her understand all the facets of her business. While studying, Rakumakoe managed to pay off the debt.
Since then, her business has grown.
After completing the degree, the 39-year-old was able to properly develop Accessible Quality Healthcare (AQH) into a recognizable brand in Mondeor, south of Johannesburg. AQH is a private medical center providing healthcare for low to middle income markets through building integrated health and wellness centers.
Besides running AQH, Rakumakoe still runs the practise in Carletonville’s mines and is now able to follow her passion and keep one eye on the books.

Doctor, you are IN the red

London could be Nigeria’s 37th state. From the underground to the finest hotels, you can hear an army of Nigerians on the march. There is an attitude about them – forward thinking, money spending – a force steeling Britain’s economy with streetwise Lagos cut-and-thrust. Be it academia, business, or just plain rich, there is plenty of Nigeria to go around in London. One of the best known is the Nigerian billionaire, Femi Otedola, who owns a $53.5-million home in the heart of rich Knightsbridge.
Otedola, the man who always wears white, clearly doesn’t believe in doing things by half. He owns a fleet of custom Rolls Royce cars in London and a Mercedes fleet in Nigeria, together worth $7.7 million. On the waters off Lagos, he has a sleek, custom-made, $19.5-million yacht in the Victoria Island lagoon. His home in Lagos is bigger than the one in Knightsbridge, with more expansive balconies and better weather.
Be it homes, gadgets or cars; Otedola appears to love the good life and doesn’t mind spending on it.
On a Thursday morning, in his tastefully furnished London pad adorned with family portraits, we meet for a chat; Otedola is jolly, answering phone calls and checking stocks on his tablet. He does this every morning after a few hours in the gym. There is no doubt it has been another prosperous year for the chairman of a leading Nigerian downstream oil company.
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Otedola was the second Nigerian to make the FORBES billionaires list in 2009. Following a major plunge in the shares of African Petroleum (now Forte Oil), he fell off the list. Another blow came when he topped the list of Nigeria’s debtors – owing banks around $900 million. Otedola has since reshuffled his finances and paid off every cent, according to the Asset Management Corporation of Nigeria (AMCON). He returns to the FORBES rich list in 2014 wealthier and wiser. He is worth at least $1.2 billion, as valued this year by the FORBES wealth unit in the United States and FORBES AFRICA. The rise in net worth was helped by a spike in the share price of his company, Forte Oil where he owns an 80% shareholding.
Otedola is part of a group of relatively young men who represent the new face of Nigerian capitalism. Born around the sixties and seventies, they came of age in the eighties and nineties as Nigeria inched deeper into military dictatorships that crippled the economy and the ambitions of entrepreneurs. They had to wait until the return of democracy in 1999 – and the subsequent opening up of the economy – to unleash their entrepreneurial skills. They have since taken advantage of the upturn in the country’s fortunes; their rise coinciding with waves of Nigeria’s economic reform.
So, how do you run up $1.5 billion in debt and become solvent in a few years? Just ask Otedola, who believes it was something he had to go through that had an echo in his childhood.
“I had my first business at the age of six. It was called FEMCO. I’d offer to groom my parents’ guests’ nails. Then, write a receipt and charge them for my service. They paid me too. I always had an interest in business. For my seventh Christmas present, I remember asking my dad for a briefcase. I just thought it was a good look. He gave me one of his and I insisted on taking it to school with me. The kids laughed at me, but I still loved the briefcase.”
Down the years, Otedola nursed his passion and grew up to work for his late father, Michael Otedola, the former governor of Lagos State.
It was a career that began with inky fingers. Otedola ran the marketing side of the family printing press in the late 1980s. It was a springboard to becoming a name in the world of Nigerian business.
An insight into the way Otedola’s mind worked came years later in a very public feud with his now best friend and one-time business partner, Aliko Dangote – the richest man in Africa. The squabble was over a bid for the Nigerian arm of Chevron, Texaco’s downstream business, which the company put up for sale in 2006. Otedola – the oil-and-gas man and second largest shareholder in Texaco at the time – was beaten to it by a company with links to Dangote, the cement-and-commodities man; a move said to be in violation of a gentleman’s agreement to respect each other’s turf. When Otedola announced that he would be investing in sugar and cement factories – Dangote territory – few missed the dig in the ribs.
The squabble lingered, but the storm passed, leaving the two men closer than brothers. A nautical manifestation of this is their identical yachts that bob side-by-side in the lagoon off Lagos.
“It was a case of conspiracy theories. Aliko and I have a genuine relationship and it was only natural that we had a few differences along the line. Today, he is my mentor. I like his sincerity and integrity. Aliko’s word is his bond and I have a lot of respect for my friend. I believe he is a real blessing to Nigeria and Africa as a whole. He is a godsend to this continent. I believe Aliko is highly underrated too. He will become the richest man on the FORBES list someday,” says Otedola.
<div id="attachment_3200" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-3200" class="size-medium wp-image-3200" src="/wp-content/uploads/2017/04/000_Par1412570-300x200.jpg" alt="" width="300" height="200" />TO GO WITH AFP STORY IN FRENCH BY JACQUES LHUILLERY ******Nigeria-économie-énergie-société-politique*** (FILES) File picture of Nigerian businessman Aliko Dangote (L) and Femi Otedola are pictured during the opening of the second Lagos domestic airport MM2, 7 April, 2007. Aliko Dangote said that he is far more wealthier than US TV anchorwoman Oprah Winfrey which US magazine Forbes said her wealth fetches USD 1,5 billion. AFP PHOTO / PIUS UTOMI EKPEI/FILES</div>
Otedola’s foray into the oil business began after he stopped working for his father and started working for himself.
Being the son of a governor, Otedola had friends in government who supplied him with diesel. Friends that didn’t do his business any harm down the years. When the political climate changed, the supply stopped. He made enquiries and approached a company for fresh supplies of diesel.
The light bulb in his head went off when Otedola saw a clanking, broken-down truck deliver supplies to his house three days after placing the order. He decided to open his own, more efficient, diesel supply business.
“I started buying diesel from a guy who had control of the market for retailing. I soon realized that a lot of companies in the country actually used diesel. I once received an order from a big transport company. The banks were closed and I could only offer a cheque. I was my supplier’s biggest customer but he refused to take a cheque from me. I immediately realized I needed to source alternative methods of getting my diesel.”
With outrageous ambition, Otedola approached the new management of the depot, which was worth $4 million, and offered to buy it for $20 million.
“I contacted Zenith Bank, sold my pitch on the venture and how we would finance it. I had a meeting that barely lasted 10 minutes with Jim Ovia (another billionaire on the FORBES rich list); he believed in me and it was a done deal. This was in 2003.”
Soon, Otedola had full control of the diesel supply infrastructure with his company, Zenon Petroleum and Gas Limited, holding 91% of the market. It turned out to be a great business decision. He set up a transport and shipping company in line with the logistics attached with diesel supply – F.O. Transport and Seaforce Shipping. At a stroke, he took control of the entire chain. He went further to diversify into property and buying into a string of other large companies. He was 35; he felt the adrenalin rush and wanted to dominate the market. All this in a mere seven years.
At this point, Otedola’s biggest competitors were oil giants Total and Mobil. Soon, he was setting the diesel price and supplying his competitors.
“While my competitors were sleeping, I was busy strategizing. I was liberal too. My strategy was: high volumes, little margins. I was very excited at this point. However, I knew that at some point the government would fix the power issue (diesel is mainly used for generators during power cuts) and I needed to move a step forward.”
In what proved a wise move to cushion the business, Zenon bought a 28.7% stake in African Petroleum. Zenon invested aggressively across the financial sector becoming the second largest shareholder in Zenith Bank, largest individual shareholder at United Bank for Africa (UBA) and many more banks in Nigeria. As the banks sought share capital, following a new directive from the reserve bank, many approached Otedola. He rolled the dice in the knowledge he was playing safe.
At that time, Zenon was very solvent and the largest diesel importer in Nigeria. It invested a lot of money in African Petroleum with Otedola increasing the shareholding from 28.7% to about 55%, at a cost of $400 million. Then, the worst happened – the crude oil prices plunged from $146 to $36 in 2008.
“We took a very big hit and I lost about $1.5 billion, plus interest, in the process. When the oil prices were dropping, I saw it all coming. I could see myself losing big money. I had diesel worth $400 million on the high seas. It didn’t look good. I’m a capitalist though. It was great while the money was rolling in. Now that I lost so much, it was also time to face the tune. It was a very low time for me and I explored different options, including suicide, but ultimately, I knew I had to solve this problem. My debts had to be paid.”
“The same banks that had once sent pretty sales ladies to get money from me for their accounts in the past were now sending tough looking men to knock at my door to get me to pay my debts in the mornings. The only people I’d credit at this point were my wife for her great support, Jim Ovia of Zenith Bank and Segun Agbaje of Guaranty Trust Bank who understood the situation and offered a restructure of the loans for ease of payment. I was however determined to pay it all up and move on. The banks sold the debt to Asset Management Corporation of Nigeria. It was a total of N200 billion
($1.2 billion).”
Otedola separated his personal fortune from his business, so Zenon was bankrupt but he wasn’t. AMCON bought the debt for $867 million. They valued the Zenon assets, Otedola’s property company and existing assets. He added some cash and there was a court settlement. He had also started selling his bank shares, before the big plunge. It dragged on for four years.
“The most important lesson I learned, is that no one is invincible. No matter how high up there you are today, you can lose it all tomorrow if you’re not on top of your game. I also learned that being a good entrepreneur does not necessarily make you a good business manager. I learned to keep my hands off managing and leave it in the hands of experts.”
Today, Otedola describes his approach to business as very risk averse and content. Having sold all the Zenon assets to pay his debts, he shifted his focus to African Petroleum which had to go through restructuring.
Otedola’s fingers were burned and he was going to be tougher this time around. In 2011, a complete overhaul saw him sack all staff at African Petroleum, albeit with a handsome severance package. In the restructuring, African Petroleum became Forte Oil.
“I also made a decision not to run the business as I had failed at running it well. I then brought in a crop of fresh young talented guys to take over. I wanted fresh, brilliant minds and ideas. I wanted to build an institution based on the best corporate governance practices; a whole new direction.”
Forte Oil owns about 500 retail outlets across the 36 states of Nigeria. Its audited half year 2014 results show growth. Its revenue grew by 33% to $511.18 million as against the $385.03 million in 2013. Contributing significantly to revenue, for the first time, is the company’s power generation segment from Amperion Power. Under Nigeria’s power privatization program, it acquired the 414MW Geregu plant in Kogi State. Overall sales costs increased by 30% to $453.39 million from $348.20 million in 2013. Gross profit surged by 57% to $57.79 million from $36.82 million while profit before tax grew by 152% to $26.92 million from $10.68 million.
Alongside recovery in underlying business performance, exposure to the power sector acted as a catalyst for a rise in the share price at Forte Oil. The company has aggressive ambitions and is on the brink of a big deal.
On returning to the FORBES list, Otedola says: “It is good to be back and is simply an indication of how well we are doing.”
On family, he says: “I’m extremely dedicated to my family. They come first at all times.”
Speaking of family, Otedola’s daughter is on the way up through turntables rather than oil barrels. Florence Otedola, one of four children who is also known as ‘DJ Cuppy’, plays and produces music on the dance floors and flies around the world to spin the tunes.
“Cuppy is a very smart young lady who will go places. She has done very well and is currently in the United States for her Master’s program. She is very talented at her DJing. It is her passion and I have no choice but to support her. I want my children to follow their respective passion and I’ll support them to the best of my ability.”
Otedola believes Nigerians are enterprising and therein lies the country’s strength. He detests the bad light in which Nigeria is often seen and hopes for fairer reporting that celebrates its successes as well.
“I’d like to see a Nigeria with about 50 Dangotes,” he says on Nigeria’s future.
As the FORBES list welcomes Otedola back, he is looking towards a brighter future and increasing his $1.2-billion wealth. He may have made a small slice of FORBES history by making a billion, losing it and clawing it back. Either way, he is burned, humbled and bouncing back – w

Tag: November 2014

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Doctor, you are IN the red

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